Managerial Economics
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Added on 2019-09-26
Managerial Economics
Added on 2019-09-26
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[TYPE THE COMPANY NAME]Managerial Economics[Type the document subtitle]Sony[Pick the date][Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]
ContentsPART 1.......................................................................................................................................................2PART 2.......................................................................................................................................................3PART 3.......................................................................................................................................................6PART 4.......................................................................................................................................................8Part 5.........................................................................................................................................................11References.................................................................................................................................................131
PART 1A.Ford is one of the companies who is making profit in automotive industry despite the factthat it is highly competitive in nature. Some of the reason of existence of profits in Fordare mentioned and discussed below:1.Seasonality – Their management tracks down the sale of vehicle when it is manufacturedand delivered to the buyer or the retailer. The scheduling of vehicle production isdependent on various factors like number of vehicles sold by their dealers or retailers tothe customers and number of vehicles present in the inventory available for sale. Theirmanufacturing capacity is higher in first half of the year to meet increasing demand in thespring and summer which are considered to be the strongest sales month of the year.2.Procurement of Raw Material – Ford does not rely on one or two raw materialsuppliers. They procure wide range of raw materials from many suppliers. To meetunpredictable demands or tackle any unavoidable circumstances they have made manysources of raw materials. There is always some risk or uncertainty involved, which canhamper the availability in sufficient amount to fulfill the company’s requirements. 3.Backlog Orders – To reduce inventory and production loss, the usually manufacture andship the units within 20 days after the order is confirmed. It helps in reducing backlogorders during that period of time.4.Customer Satisfaction Actions – Customers prefer to buy ford cars because of theirwarranty coverage. Their warranties are offered for particular period of time and it varies2
subjected to the type of unit and sales location. They provide free services like repairing,replacing and adjusting all the parts which are not functioning properly.B.“The price variation in crude oil impacts the sentiments and hence the volatility in stockmarkets all over the world. The world equilibrium price of gasoline fluctuates primarilybecause of spikes and collapses in crude oil input prices caused at various times bysupply disruptions and gluts, increasing demand in developing countries, andspeculation.”When the price of the crude oil fluctuates and it becomes lower, the governments ofvarious countries increase the excise duties and they increase the VAT too ("Gas PricesExplained", 2016). This shore up their revenues and the prices of petrol/gasoline are kepthigh for the retail consumers. Then, another reason is that when the price of crude oilfluctuates, the demand for the gasoline starts fluctuating because they are substitutes ofeach other (Abhishek Waghmare, 2016). When crude oil becomes expensive, the peopledemand gasoline and the higher demand leads to increase in the prices of gasoline. InMalaysia, the prices of crude oil are fixed using the float system and the prices of petrolare fixed using the automatic price mechanism. As compared to other countries, theprices of fuel in Malaysia are static or higher for past few years. Since the price for boththe fuels is determine differently in this country, so the price fluctuations in crude oil hasless impact on the prices of petrol ("Malaysian Petrol Price Compared To OtherCountries - Business Insider", 2014). The other factors that affect the petrol price inMalaysia are the demand and supply because the prices is fixed automatically with theinteraction of demand and the supply. 3
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